In the heart of Ho Chi Minh City, Vietnam's southern commercial hub, is a little piece of North Korea.

The Pyongyang Taedonggang restaurant - owned by a state trading firm from Pyongyang and staffed by a highly trained female propaganda troupe - is packing them in nightly in an upstairs room on Nguyen Thi Minh Khai Street on the edge of the city's downtown.

Their Japanese counterparts stare agog at the young women clad in billowing silk national costumes, each sporting a badge of the founder of Pyongyang's ruling dynasty, Kim Il-sung. And for Vietnamese regulars, there is a touch of nostalgia for the tightly orchestrated propaganda performances that once accompanied more hard-line rule here.

The menu ranges from Korean-style salmon sashimi and kim chi to boiled dog and a gristly offering described as 'head flesh-like ham'.

'It is so powerful, so inspiring,' said South Korean diner B.K. Choi, flushed after a boozy dinner and hot talk of future North-South relations. 'It may be propaganda, but these women still manage to touch the heart ... coming here for a night makes you feel good to be a Korean.'

For Vietnamese diner Minh, a classically trained pianist, there is amazement at the high standard of the performances. The women wait on tables before taking to the stage, singing in Korean, Chinese and English, from patriotic anthems to O Sole Mio. 'It is incredible to see how these women go from being waitresses one minute to singing with such passion and grace ... this is just like the old propaganda troupes we used to see years ago, the ones that would try to keep the workers and soldiers happy,' he said.

Enticed to the electric piano himself, Minh takes a request from the North Korean side. Beethoven's Fur Elise comes the reply, another sign of their classical training.

The staff chat with diners between songs, passing out bouquets of plastic flowers.

A manager - who regular diners refer to as 'the commissar' - keeps a beady eye on her charges to ensure all talk remains strictly small.

'It is good to be here in Vietnam, but of course we miss our families,' says one waitress. They stay for three-year rotations before heading home, she adds.

The walls are lined with glowing images of a sun-kissed Pyongyang, showing city lakes filled with wind surfers and couples in rowing boats. Shelves near the till offer North Korean ginseng and alcohol.

The restaurant is run by the Korean International Travel Company, a firm with various operations in 'friendly' nations, including China, Cambodia and Indonesia. Running under different guises for four years, the restaurant has recently moved to its current location, whose stage allows large performances.

Diplomats are eagerly watching the restaurant's development, saying it is a much more public foray into ordinary business than the hermit state usually permits.

The region is dotted with small North Korean trading firms operating in a more discreet fashion to earn hard currency, some linked to counterfeiting and drugs smuggling.

'They seem keen to wave the flag a little bit in a safe country, and earn some respectable hard funds,' said one veteran envoy.

'The big question is whether they are trying to learn a little bit about ordinary business for the sake of long-term reforms.'